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New accounts impact on credit score

Super Contributor

New accounts impact on credit score

How long do new tradelines have a negative impact on your CR for?

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Starting Score: EQ: 714, TU 684
Current Score: EQ: 725 7/30/13, TU 684 6/2013, Exp 826 4/16/17, Last App 8/5/17
Goal Score: 800 (Achieved!) In garden until Sepetember 2019
6 REPLIES
Mega Contributor

Re: New accounts impact on credit score


red259 wrote:

How long do new tradelines have a negative impact on your CR for?


I would say 6 months to a year. 




EQ FICO 548 3/3/16
Moderator Emerita

Re: New accounts impact on credit score

LS is correct. Though depending on the thickness of your file and how many new accounts the time period can be less.
Member

Re: New accounts impact on credit score

Even with my thin file it's still very little damage. I was hurt a few points by getting 4 new cards few months ago, then when the new limits reported it brought my debt ratio down. about 7% to 3% and my score actually went up 3 points. Many people are afraid their scores will drop, but unless your right along the border of a score bracket and planning to make a big purchase through a loan in the next 6 months or so I wouldn't even sweat it.

Super Contributor

Re: New accounts impact on credit score


09Lexie wrote:
LS is correct. Though depending on the thickness of your file and how many new accounts the time period can be less.

Slightly different from Inqs, which absolutely have no Fico score impact after 12 months.   So another answer is that new accounts impact indefintely via reducing AAoA, but as Lexie implies, the impact can be very small if you have lots of accounts, and quite large and last a while if the new account is only your second one or if you have several new accounts.

Super Contributor

Re: New accounts impact on credit score

+1 to what others said.

 

New accounts also have an impact outside of your score. Several lenders are very sensitive to new accounts being reported, and will deny applications even if your scores are really high. 

JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
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Super Contributor

Re: New accounts impact on credit score


Ailee92 wrote:

Even with my thin file it's still very little damage. I was hurt a few points by getting 4 new cards few months ago, then when the new limits reported it brought my debt ratio down. about 7% to 3% and my score actually went up 3 points. Many people are afraid their scores will drop, but unless your right along the border of a score bracket and planning to make a big purchase through a loan in the next 6 months or so I wouldn't even sweat it.


It also depends on the existing AAoA of the account.   So if all your accounts are fairly new, adding some more, bringing AAoA from 1 year to 8 months say, might not have a huge impact, and depending on utilization, your score could even go up.

 

But if you have 5 cards each 5 years old, and you add another five new ones, the AAoA going from 5 to 2.5 probably would cause a noticeable decrease.   (And if you have lots of very old cards, adding new ones doesn't move AAoA much at all...)